NEW DELHI (Reuters) - India has raised the base price it will pay farmers for common rice to 1,310 rupees per 100 kilograms from 1,250 rupees last year, Food Minister K.V. Thomas told reporters on Thursday.
The government sets a minimum support price (MSP) for key crops to give farmers an incentive to produce supplies needed for welfare programmes that give cheap food to half a billion poor. The MSP also protects farmers from excessive price falls.
India, one of the world's major producers and consumers of grains, has built up massive stocks of rice and wheat because of bumper harvests encouraged by these guaranteed prices.
Plans to expand its food subsidy programmes will need some extra supplies, but the country is still able to export both wheat and rice and sell at preferential prices to domestic bulk buyers.
(Reporting by Mayank Bhardwaj; editing by Malini Menon)
